Merchant account Vs. PayPal – Which is better?

Most customers today use credit cards for payments when making a purchase and this requires businesses to have authentic payment gateways. While most businesses prefer a merchant account to be able to accept credit cards, some go for third party services like PayPal.

Here’s how businesses distinguish the two services and make their preference.

An Easier Payment Solution 

 

Every business wants an authentic payment gateway for completing a transaction and most find a merchant account better than a PayPal account, especially startup businesses. And those who need an easy, cost-effective and quick method prefer PayPal. Still, a merchant account always has an edge over a PayPal account. 

Let’s know why:

1. When you have a merchant account, all the payments made by your customers get directly deposited in it, whereas with a PayPal account you need to request the transfer of a payment to your account or else it’ll stay there only.

2. A merchant account charges fixed monthly service fee and is cost-effective, but transaction fees a PayPal account charges is relatively higher.

3. Merchant accounts offer quick support for customers facing problems, but PayPal accounts don’t.

Advantages of High Risk Merchant Accounts for Business Startups

When starting a business, you need enough financial backup in the form of extra cash to run it and improve the sale. At times you don’t even have enough time and need to arrange money in a too short time period. This is when a high risk merchant account comes in to help you.

Benefits of a High Risk Merchant Account

A merchantaccount is highly helpful when you are starting up a business and want to prosper.

Advantages of a high risk account:

·    Normal business loans take too much time for approval because of which your monthly profit suffers

·      Whereas, most high risk accounts get approved more quickly and are of great help in tough times.

·     You always have the option of seeking help from an offshore merchant account provider offering high risk credit card processing. 

These companies charge low processing fees and since their terms and conditions are quite flexible, there remain great chances for approval.

High risk merchant account service providers

As a high risk processor, the motive of a high risk merchant account provider is to help businesses and individuals obtain high risk merchant accounts for a better high risk credit card processing.

If you’re looking for a high risk merchant account and a secure gateway, but owning to your risky nature of the business, you have been turned down by acquiring banks, then merchant account providers will come to your rescue. 

Merchant service high risk providers partner with acquiring banks and high risk processors around the globe and make it possible for high risk merchants to obtain merchant account at most competitive rates. 

So, whether a business is a startup or an established entity, high risk processor makes sure that a high risk business has a high risk merchant account which suits its individual needs at very realistic rates and nominal fees. 

By processing credit card payment with high risk processor merchant are able to integrate their existing shopping cart to enable seamless transactions. All funds that are accumulated are deposited directly into the merchant’s account which eliminates the task of going through a third party, making the process easy and quick.

What is a High Risk Merchant Account?

When you are in business, marketing your products or services alone is not enough. It’s the age of paperless money, electronic transactions and therefore, you should be extremely careful with your customer’s money and their personal information in order to ensure business operations. In no way or at no time would you want your customers to think that they are indulging in a faulty service and that their money or financial information could get compromised! That’s where high risk merchant accounts can help.

If you are running a business, which operates in a high risk market and has risks of financial failures looming large, you almost certainly need a high risk merchant account; a regular merchant account won’t serve the purpose and even if does, it might fail you at the most crucial hour. 

So, in a Nutshell …  

A high risk merchant account is a facility provided to businesses that accept a major chunk of their payments through credit cards (Card Present or Card Not Present). Protected by anti-fraud security systems, high risk merchant accounts help e-commerce enterprises (and others who receive orders telephonically) to introduce additional layers of security so as to eliminate the possibility of credit card fraud or data theft. 

Do You Need One? 

No matter what type of business you are running, you will need a merchant account at some point in time.

Why I need a high risk merchant account?

Well, because this is the best way to receive payments via credit or other types of cards. Operation of such an account is governed by an agreement between a credit card acceptor (business) and the acquirer (financial institution, providing the business the facility).

High risk merchant services no doubt charge higher fees in order to compensate the risk involved, they also save businesses from TMF statuses and deduct relatively lower chargeback fees. Such services are governed by flexible chargeback policies.  

Who Is An Acquirer?

A bank or financial institution, which provides a business credit card merchant account and has relationship with the merchant’s personal bank account and the Visa and MasterCard services is called an acquirer.

The acquirer provides high risk merchant accounts and is then liable to clear the card transactions to the merchant’s bank account as and when the transactions are charged from the card holder’s account. 

Important Pointers 

Acquiring a high risk merchant account from one of the acquirers makes it easy and safe to process credit cards. It is the quickest and easiest way to receive a payment that is due to the business account.

From online casinos, adult service providers, travel services, telemarketing businesses to home run businesses and online auctions, hundreds of e-commerce businesses get such accounts. Businesses with high transaction volumes, bad credit, off shore operations or TMF statuses are the best candidates for high risk merchant account services. 

While, a high risk merchant account is really useful for high risk businesses in particular, other types of business which are no high risk type can instead acquire a standard eCommerce merchant account for easy processing of credit cards and other such instruments online.